Dwelling Coverage

What Does Dwelling Coverage Mean?

Dwelling coverage is a component of homeowner’s insurance policies that protects against damage to the physical structure of a home and its fixtures. The insurance company agrees to compensate the policyholder for the costs associated with rebuilding or repairing the home’s structure due to damages resulting from covered perils.

Setting the right dwelling coverage limit is one of the bigger decisions when buying a policy, since it caps how much your insurer will pay to rebuild after a total loss. Figuring out how much homeowners insurance you need usually starts with estimating rebuild cost per square foot, not market value.

Insuranceopedia Explains Dwelling Coverage

In addition to the main structure of the home, dwelling coverage also protects structures attached to the home, such as garages, sheds, decks, and patios. It typically covers fixtures within the home, including electrical wiring, plumbing, air conditioning, and built-in appliances. However, it does not cover detached structures.

Dwelling coverage can be included as part of a homeowner’s insurance policy or exist as a standalone policy, in which case it is referred to as dwelling insurance. Because coverage limits and what counts as a covered peril vary between insurers, it’s worth comparing the best homeowners insurance companies before picking a policy.